What changed
RBI issued a circular on June 17, 2013, applying the May 30, 2013 prudential guidelines on restructuring of advances to FIs. The guidelines apply mutatis mutandis, but provisions related to working capital, overdrafts, and personal loans are excluded since FIs don't typically offer these products.
What it means for you
FIs must now follow the same restructuring norms as scheduled commercial banks, ensuring consistency in asset classification and provisioning. This levels the playing field but requires FIs to adapt their internal policies to the new framework, excluding only the inapplicable product categories.
What you must do
- Review and align your restructuring policies with the May 30, 2013 circular and June 6, 2013 clarification.
- Exclude provisions related to working capital, overdrafts, and personal loans from your implementation.
- Train staff on the updated prudential guidelines for restructuring advances.
- Update internal compliance checklists to reflect the new requirements.
Who it affects
All-India Term-Lending and Refinancing Institutions (Exim Bank, NABARD, NHB, SIDBI)
Do these guidelines apply to all products offered by FIs?
No, provisions related to working capital, overdrafts, and personal loans are excluded because FIs generally do not extend such facilities.
What is the effective date of these guidelines?
The circular was issued on June 17, 2013, and the underlying bank guidelines were dated May 30, 2013, with a clarification on June 6, 2013.
Which FIs are covered by this circular?
The circular is addressed to Exim Bank, NABARD, NHB, and SIDBI.